Global Alternative Financing Market Report and Forecast 2024-2032

Global Alternative Financing Market Outlook

The global alternative financing market size reached approximately USD 12.23 billion in 2023. The market is assessed to grow at a CAGR of 17.5% between 2024 and 2032 to attain a value of around USD 52.41 billion by 2032.

Key Trends in the Market

Alternative financing refers to funding or financing that is granted by mediums other than traditional lenders like banks. Some examples of alternative lenders are investment funds, private equity firms, credit unions, hedge funds, and venture capital investors. Alternative financing typically boasts a quicker and easier lending process and offers loans without collateral at low-interest rates.

• One of the key alternative financing market trends is the emerging shift from traditional financing options like banks to alternative financing modes like crowdfunding and corporate venture capital, especially among start-ups and small and medium-sized enterprises. Such financing modes are flexible, boast an easy application process and quick approval turnaround, and eliminate the requirement for collateral.

• The emergence of fintech in both developed and developing countries is positively impacting the alternative financing market growth. Fintech companies are increasingly providing alternative financing solutions with flexible repayment options, lowered interest rates, and personalised terms, surging the accessibility of lending among underserved populations and organisations.

• The trend of digitalisation and virtualisation, supported by Industry 4.0, is expected to support the alternative financing market growth in the forecast period. Moreover, lenders are increasingly leveraging technologies like artificial intelligence (AI) and machine learning to improve their operational efficiency and quality of offerings, automate various processes, analyse credit scoring of borrowers, and offer personalised services to clients.

Market Analysis

Based on type, the alternative financing market segmentation includes peer-to-peer lending, crowdfunding, and invoice trade, among others. On the basis of end use, the market can be divided into individual and businesses. The major regional markets for alternative financing include North America, Europe, the Asia Pacific, Latin America, and the Middle East and Africa.

The comprehensive EMR report provides an in-depth assessment of the market based on the Porter's five forces model along with giving a SWOT analysis. The report gives a detailed analysis of the following key players in the global alternative financing market, covering their competitive landscape and latest developments like mergers, acquisitions, investments and expansion plans.

• On Deck Capital, Inc. 

• GoFundMe, Inc.  

• Edinburgh Alternative Finance Limited 

• Funding Circle Ltd 

• Wefunder Inc. 

• LendingTree, LLC

• Peerform, Inc. 

• LendingClub Bank  

• Fundly, Inc. 

• Prosper Funding LLC 

• Others

Market Share by Type

As per the alternative financing market analysis, peer-to-peer (P2P) lending is experiencing a rapid growth as it enables users to directly obtain loans while eliminating the requirement for middlemen. P2P lending platforms evaluate borrowers through different aspects such as their income, credit score, employment, and social media activities, among others, to evaluate their creditworthiness.

In the forecast period, the popularity of crowdfunding is likely to significantly increase as it offers accessibility to diverse investors and empowers businesses and individuals to eliminate upfront fees. Crowdfunding platforms also serve as a way for businesses to market their products and gain valuable insights.

Market Share by End Use

Businesses are anticipated to represent a significant portion of the global alternative financing market share in the coming years. SMEs are increasingly preferring alternative financing options due to their efficient and smoother financing process and growing concerns regarding inflation, rising interest rates, and bank failures, among others. Businesses operating in sectors like construction, industrial, and transportation, among others, rely on equipment and hard assets, which boost their inclination towards alternative financers to provide agile and flexible funding.

Competitive Landscape

On Deck Capital, Inc., headquartered in New York, United States, and a part of Enova International, Inc., is a company that offers loans to small businesses throughout the United States. With its establishment in 2006, the company has emerged as a pioneer in meeting the needs of small-sized businesses. Some of its offerings include a business line of credit and a business term loan to meet the unique requirements of small businesses.

GoFundMe, Inc. is a community-powered fundraising platform that enables individuals to start their fundraiser, share it with friends, and manage donations seamlessly. It was founded in 2010, and since has established its reputation as a leading fundraising platform for medical emergencies, non-profit organisations, and education, among others.

Edinburgh Alternative Finance Limited, established in 2014, is a prominent fintech company based in Scotland. It is one of the leading alternative financing companies and supports businesses to meet their requirements through its peer-to-peer platform. The company aims to leverage technologies such as machine learning and artificial intelligence to provide financing to small and medium-sized enterprises across the United Kingdom.

Other alternative financing market players include Funding Circle Ltd, Wefunder Inc., LendingTree, LLC, Peerform, Inc., LendingClub Bank, Fundly, Inc., and Prosper Funding LLC, among others.

Key Highlights of the Report